The impact of minimum wage on the labour market in Estonia: an empirical analysis

No 2003-8, Bank of Estonia Working Papers from Bank of Estonia

Abstract: In Estonia, as in several other EU acceding countries, minimum wage has been on an upward trend and in the coming years it will expectedly be raised faster than the average wage. Despite its rapid increase, the impact of the minimum wage on Estonian labour market has not been analysed. The current paper aims to fill this gap. We estimate the effect of the minimum wage on employment and wages in Estonia during the period of 1995-2000, using micro-data from Estonian Labour Force Surveys. The estimation results indicate that a minimum wage increase leads to employment reduction for the group of workers who are directly affected by this change, ie those whose wages have to be raised as a result. Additional negative effect of raising the minimum wage is that the rate of compliance with this regulation diminishes as a result, thereby enlarging the share of workers whose salaries remain below the legally set minimum.

Pages: 43 pages
Date: 2003-10-12, Revised 2003-10-12
New Economics Papers: this item is included in nep-lab and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Published

Downloads: (external link)
http://www.eestipank.ee/sites/eestipank.ee/files/p ... pers/2003/wp_803.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eea:boewps:wp2003-08

Ordering information: This working paper can be ordered from
Estonia bld. 13, 15095 Tallinn, ESTONIA

Access Statistics for this paper

More papers in Bank of Estonia Working Papers from Bank of Estonia Estonia bld. 13, 15095 Tallinn, ESTONIA. Contact information at EDIRC.
Bibliographic data for series maintained by Peeter Luikmel ().